Frequently Asked Questions
Roth IRA

These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.

Unlike a Traditional IRA, Roth IRA account holders must meet certain income requirements to qualify; accountholders must have earned Income and an AGI (Adjusted Gross Income) below $129,000 if single or $191,000 if married, filing jointly.

Roth IRA contributions are made with after-tax dollars but funds invested can grow tax-deferred when certain conditions are met.

If I have a Traditional, SEP or SIMPLE IRA, can I move money into a Roth IRA?

Yes, you can 'convert' your Traditional, SEP or SIMPLE IRA into a Roth IRA if you meet the requirements for a Roth IRA.

Previously, if you wanted to move your assets from a qualified plan to a Roth IRA, you had to roll over the assets to a Rollover IRA, then convert the Rollover IRA to a Roth IRA.

Starting in 2008, funds from your employer retirement plan can be rolled directly to a Roth IRA - with, however, federal income tax due on pre-tax contributions and earnings. Once money has been moved to a Roth IRA, additional earnings accumulate tax-free.

The Pension Protection Act also eliminates the Roth rollover ceiling starting in 2010, which prevented a person earning over $100,000 in modified adjusted gross income from converting to a Roth. Starting in 2010, anyone - regardless of income - can convert funds from a 401(k) plan to a Traditional or Roth IRA.

If your IRA is not held at Midas Fund, you can convert a Traditional, SEP or SIMPLE IRA (after a two-year holding period is met) at another institution to a Midas Fund Roth IRA using either:

Transfer your IRA to an identical IRA at Midas Fund. When the transfer is complete, you can initiate the conversion to a Roth IRA.

Convert your Traditional, SEP or SIMPLE IRA to a Roth IRA while custodied at your other institution. When the conversion is complete, you will need to initiate the transfer of your Roth IRA to a Midas Fund Roth IRA.

You must complete your Roth IRA Conversion no later than December 31 of the tax year. To ensure that your account is converted by year end, it is recommended that you submit your paperwork no later than December 15.

To be eligible, you must have MAGI (Modified Adjusted Gross Income) not exceeding $125,000 if filing single or jointly. For this purpose, MAGI does not include the amount of the conversion, and beginning in 2005 clients over 70-½ do not include the amount of their Required Minimum Distribution (RMD).

Married individuals filing separately are not eligible to convert from a Traditional IRA to a Roth IRA.

I contributed too much money to my Roth IRA. What can I do if the tax year deadline has lapsed?

You can remove the excess funds after the tax filing deadline, including extensions, but a 6% penalty will be charged.
Note: The IRS has not addressed the issue regarding whether earnings must be removed after the tax filing deadline for excess Roth IRA contributions. It is recommended that you check with your tax advisor to determine the best solution for your individual situation.

I am over 70-½ and need to take a Required Minimum Distribution (RMD) from my IRA. Can I convert my assets to a Roth IRA before the deadline?

If you want to convert your Traditional, SEP and/or SIMPLE IRA to a Roth IRA and are required to take the RMD from your non-Roth IRA, the RMD must be removed before the conversion can occur. The RMD cannot be converted and cannot be left in the Traditional IRA at the time of conversion. The first amounts removed from the Traditional IRA represent the RMD.

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You should carefully consider the investment objectives, risks, charges and expenses of the Midas Funds by reading the prospectus carefully before investing or sending money. Consult with your tax advisor or attorney regarding specific tax issues.

Investment products, including shares of the Midas Funds, are not federally or FDIC insured, are not deposits or obligations of, or guaranteed by, any financial institution and involve investment risk, including possible loss of principal and fluctuation in value.

For investment risks associated with the Funds, please read "Principal Risks of Investing in the Fund," and "Investment Objectives, Principal Investment Strategies, Related Risks, and Disclosure of Portfolio Holdings" in the free prospectus, which contains this and other important information about the Midas Funds. You can obtain a prospectus by contacting us at 1-800-400-MIDAS (6432) or downloading it here.

The Midas Funds are managed by Midas Management Corporation, a wholly owned subsidiary of Winmill & Co. Incorporated. Winmill & Co. is engaged through subsidiaries in stock market and gold investing through its investment management of mutual funds and closed end funds.

Past Performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Each of the investment products (including the mutual funds) or services referred to in this site may be offered only to persons in the United States. This website should not be considered a solicitation or offering of any investment products or services to investors residing outside the United States. Each Fund is described in a combined prospectus that contains more complete information about each Fund, including management fees and other charges and expenses. Request a prospectus and read it carefully before you invest or send money. Please call us at 1-800-400-MIDAS (6432) to obtain a free prospectus or download it here. "Midas", "Midas Funds" (design), and "The Midas Touch" registered trademarks are the property of Performance Driven Properties, Inc. Midas Securities Group, Inc., Distributor.